Overall, CAANZ supports the direction of the proposals in the Exposure Draft ED/2019/7 General Presentation and Disclosures ("the ED"). These proposals will be steps forward towards improving consistency, comparability and the decision usefulness of the information in the financial statements. The outreach identified some areas of stakeholder concern in the proposals, some important challenges to be overcome in order to realise the benefits and some recommendations for further refinement.
The proposals to introduce new subtotals and categories in the statement of profit or loss are welcomed with more guidance required on what constitutes an entity's “main business activity”. The feedback received also suggests users of financial statements could be confused by using the same terminology for investing activities in both the profit and loss and the statement of cash flows. We recommend the use of distinctive labels that would more clearly differentiate.
The proposed requirement to define unusual income and expenses and to require entities to disclose them in a single note will improve comparability among entities. Some concerns were raised by the members on the classification and definition which have been raised in the submission along with recommendations for improvement.
The IASB’s efforts to bring more transparency and reliability around the current use of MPMs by a wider range of entities will make it easier for investors and key stakeholders to find useful information they need for their analysis. However, there is a need for some refinement in the definition of MPMs, to provide further clarity on scope and addressing audit implications where reference is made to public information.
CA ANZ do not support the proposal for an ‘integral’ and ‘non-integral’ distinction as outreach has indicated limited demand for this information, which would potentially involve considerable cost and complexity.